Tag: Roger Bybee

Our May/June issue is out! Print subscribers should get their copies soon, and electronic subscribers just received their full-color pdfs. And we have posted the cover feature, an interview with economist Jayati Ghosh, The ‘Emerging’ Economies Today. And here is this issue’s editorial note:

The Age of Misdirection

Name a problem, and someone in a position of power or privilege will have a diversionary explanation for it. One that is consistent with—or even redoubles—their power or privilege.

John Miller takes on one of these diversionary tactics in this issue’s “Up Against The Wall Street Journal.” Economist Lawrence Lindsey, erstwhile economic advisor to George W. Bush, says “progressives” are to blame for rising inequality in the United States. In fact, inequality of market incomes has risen under both Democratic and Republican administrations—thanks to the erosion of unions, weakening of the welfare state, adoption of pro-corporate “free trade” agreements, and the like. Redistributive tax and spending policy do some, but not enough, to reduce inequality.

Nor have government policymakers done what they could to spur economic recovery or restore full employment in the wake of the Great Recession. Gerald Friedman notes—in an ongoing debate with critics of his writings on Bernie Sanders’ economic program—that mainstream economists are telling us to just accept today’s stagnant economy as the new normal. That’s all well and good for large corporations and the very wealthy. The once-again-rising tide has lifted their boats. Not so for the majority, who are struggling to keep their heads above water.

We see more sleight-of-hand politics when it comes to taxes. To dodge taxes, U.S. corporations stash trillions in profits in fictitious overseas accounts. That’s still not enough for some of them, Roger Bybee points out, so they engage in “inversions”— their legal takeover by companies headquartered in lower-tax countries. Confronted with this spectacle, government and corporate leaders say: We need to cut “punishing” corporate taxes! We need a “tax holiday” for corporations to repatriate profits “trapped” abroad! The mainstream press has responded to the “Panama Papers” scandal—which revealed details about tens of thousands of offshore bank accounts, likely used to dodge taxes—in much the same vein. The Wall Street Journal, Bill Black points out in his “Comment,” argues that the rampant concealment of private wealth is nothing more than a “distraction” (and that we should focus instead on government corruption).

Privilege may be concentrated at the very top (in the United States today, increasingly so). But, as Jeannette Wicks-Lim argues in “It Pays to Be White,” the story is much more complex than just “the 1%” against everyone else. In particular, the U.S. racial caste system stacks the deck, in a multitude of ways, in favor of whites and against African Americans. The attachment to white privilege is deeply ingrained, buttressed by the belief that “White people tend to get more because they deserve more, while Black people get less because they deserve less.” That creates a deep divide within the ranks of the “99%.” And it gives today’s racist demagogues, in the ultimate misdirection, scapegoats on whom to blame society’s ills.

One way to read all this, with some justification, is that the powerful and privileged will stop at nothing to hold on to their positions. Another, however, is that they are desperately improvising as their hold on society becomes more tenuous. Elites try to shift the blame for income inequality, economic stagnation, corporate tax dodging, and so on because they understand that more and more people see these as blameworthy. It’s not just in the United States where those in power are facing challenges to their authority and legitimacy. Jayati Ghosh points out that three sectors of the capitalist world—rich “core” capitalist countries, “emerging” economies that export manufactured goods to the core, and suppliers of raw-material and intermediate inputs for emerging-economy manufacturing—are tied together by trade and finance. Stagnation in the core has undermined export-oriented manufacturing and, with it, the raw-material commodities boom. The elites in these countries will have to move towards more inclusive, demand-driven growth, or face rising protest.

Here in the United States, we may not see mass protests right now, but we do see profound mass disillusionment with private and government elites. Even when those in power have steered society into a crisis, the existing order is likely to persist so long as people believe that those who created the mess will … somehow, some way … be able to fix it. When that belief no longer holds, change can occur quite dramatically.